Despite Facing Back-to-Back Downgrades, Coinbase Shares Rise with Crypto Markets

Coinbase Rallies Despite Fresh Sell Rating From H.C. Wainwright

Coinbase (COIN) shares rose over 4% on Thursday, shrugging off a rare double downgrade from H.C. Wainwright, which cautioned that the crypto exchange could face a challenging second quarter.

Analyst Mike Colonnese lowered his rating on Coinbase from buy to sell, warning that the company’s sharp rally may have run ahead of its fundamentals.

“We continue to view Coinbase as a leading crypto exchange and are bullish on the broader sector,” Colonnese noted in a report. “However, the stock’s approximately 150% surge since April has pushed valuations beyond what near-term fundamentals justify.”

Colonnese pointed to signs of slowing spot trading activity across centralized exchanges, which could weigh heavily on Coinbase’s transaction revenue—the exchange’s main source of income. Still, he remains optimistic about growth in the company’s subscription and services business, including staking and custody.

Colonnese’s downgrade sets him apart from other analysts on Wall Street. Barclays, while predicting a weaker second quarter, has retained a neutral stance, and Oppenheimer remains positive with an outperform rating on COIN.

Despite the bearish outlook, Coinbase shares closed up nearly 4% on Thursday, buoyed by ongoing momentum in the crypto market. Bitcoin climbed another 2%, reaching a fresh record high above $113,000.